SPLC — The Bloated “Endowment Fund”

Southern Poverty Law Center founder Morris Dees became a millionaire in 1964, according to his law and business partner at the time, Millard Fuller. Dees’ fortune did not come from practicing law, however, but rather from a hugely successful direct mail order business created by Dees and Fuller.

The two had met in law school a few years earlier, where they devised an ingenious business plan to deliver birthday cakes to their homesick classmates who could not be with their families during the school year. The partners invested their profits in local real estate, eventually splitting $70,000 in assets between them at graduation in 1960 (roughly half a million in today’s dollars). “But the real bonanza was the education I got in direct mail,” Dees wrote, “I learned to write sales copy, to design an offer, and to mail at the most opportune time.”

Dees had mastered the art of the direct mail appeal, and more importantly, perfect timing. Forty years later, when Dees was inducted into the Direct Marketing Association’s Hall of Fame, it would be for his fund-raising prowess rather than his business acumen.

Nowhere is the evidence of that acumen more apparent than with the SPLC’s incredibly bloated “Endowment Fund.” The purpose of the fund, according to SPLC annual reports is to “…build for the future by setting aside a certain amount of its income for an endowment, a practice begun in 1974 to plan for the day when nonprofits like the SPLC can no longer afford to solicit support through the mail because of rising postage and printing costs.”

In his November 2000, article for Harper’s magazine, The Church of Morris Dees, journalist Ken Silverstein documents Dees’ ever-growing desire to fatten this grotesque cash cow.

“Back in 1978, when the Center had less than $10 million, Dees promised that his organization would quit fund-raising and live off interest as soon as its endowment hit $55 million. But as it approached that figure, the SPLC upped the bar to $100 million, a sum that, one 1989 newsletter promised, would allow the Center “to cease the costly and often unreliable task of fund raising. ” Today, the SPLC’s treasury bulges with $120 million, and it spends twice as much on fund-raising-$5.76 million last year-as it does on legal services for victims of civil rights abuses.“

As the chart below illustrates, Mr. Dees has yet to settle upon the magical figure that will free him from his odious fund-raising duties. In 2007, the Endowment Fund actually broke the $200 million dollar mark, and still the fund-raising requests went out like clockwork, backed up by SPLC public relations guru Mark Potok’s spurious and unlikely “reports” and breathless alarums.

Even an old pro like Morris Dees has his setbacks, such as the $50 million dollar whack the fund took in 2008. But as Patrick Cleburne points out in his recent analysis of SPLC fund-raising tactics, this was merely a bump in the road. By 2009 the SPLC had recouped nearly $40 million of its losses, and did so during one of the worst years of the current recession. As Ken Silverstein observed in a 2007 piece for Harper’s, the SPLC was once again “richer than Tonga” and several other nation states. Not bad for a “non-profit.”

When will the Endowment Fund ever generate enough in interest to finally achieve Mr. Dees’ long awaited dream of financial independence? The truth is that it has been doing so for years.

According to the SPLC’s 2009 Financial Statement, the Center took in just over $31 million dollars that year, almost all of it from private donors. Total operating expenses for the year came to $29.6 million, leaving the non-profit with a profit of $1.4 million in leftovers.

The Endowment Fund generated just under $29.5 million in interest, which nearly meets the $29.6 million in expenses, however, if you deduct PR guru Potok’s $146,000 dollar compensation, (after all, his whole purpose in the organization is to scare the mostly elderly donors out of their donor-dollars), you more than break even.

Deduct the $5.3 million the SPLC spent on fund-raising printing and postage costs, (compared with the $1.1 million they spent on “legal case costs”), and the Endowment Fund could continue to grow at an obscene rate, all without ever requesting another single tax-free donor-dollar.

Those figures do not even take into consideration any additional savings that would be realized by eliminating the salaries paid to Potok’s minions or other costs of the SPLC’s fund-raising machinery.

As with everything else spewed forth by the Southern Poverty Law Center, once you actually look at the numbers you come away with a very different picture than that painted by Minister for Propaganda and National Enlightenment Potok.

In the final analysis, the Endowment Fund IS the main business of the Southern Poverty Law Center.

2 Responses to “SPLC — The Bloated “Endowment Fund””

Thanks for exposing so many questionable activities and motives. All that money and salaries sure go a lot further in Alabama too. Since they promote that all illegal aliens are poor victims, lets see the SPLC funnel $10-20M to directly support illegal immigrants living here (only 1 in 20 does farm labor now). There’s even room in their nice guest house.